Standards are a cornerstone of the financial industry. 

For over 40 years the SWIFT MT standard has enabled industry automation, reducing the cost and risk of cross-border business, and enabling the development of the correspondent banking system on which world trade depends. Today, around 28 million MT messages are exchanged on the SWIFT network every day.

But after forty years, MT is beginning to show its age. MT was designed at a time when storage and bandwidth cost more than they do today, so emphasizes brevity over completeness or readability of data. It predates the emergence of anti-terrorist financing regulation, which requires payments to be screened against sanctions lists, and the development of ‘big data’ technology, which can extract important business intelligence from transaction data. It limits text to a Latin-only character set, which is no longer ideal now that many of the world’s fastest-growing economies are in Asia.

While MT continues. SWIFT in collaboration with the industry, has worked to develop and promote ISO 20022, which addresses many of the shortcomings of MT. 

Migration Drivers

The success of ISO 20022 amongst market infrastructures has led to increasing community demand for ISO 20022 for cross-border business. 

There are several reasons for this, particularly for international payments: 

Consistent Experience For Customers: Complete data needs to be transported end-to-end through a business process that involves an ISO 20022 MI, or a transaction originated by an ISO 20022-enabled customer. 

New Customer Services: ISO 20022 enables new capabilities that can be used to deliver new services. 

Compliance Concerns: ISO 20022 is better adapted to carry the full party information (payer and payee) that regulation demands, plus the enhanced data definitions of ISO 20022 promise more efficient AML and sanctions screening. 

Some drivers and benefits of ISO 20022 migration extend to securities and other markets as well: 

New Generation Technology: ISO 20022 was designed to be ‘future proof’ and adapt to new technologies. 

Rethink Business Processes: Migration to ISO 20022 presents an opportunity to rethink or redesign suboptimal business processes, including the possibility to introduce value-added services at the centre. 

Streamlining Of Data Models And Reporting: The ISO 20022 data model supports all securities processing related flows, which can help organizations comply with reporting obligations. 

With this global migration, Financial Institutions across the globe will be facing several challenges, migration testing and leveraging the rich ISO 20022 are the two key challenges. We enable banks to overcome these challenges by implementing our cloud-native solutions. 

Pamir - ISO 20022 Data Platform 

Pamir - ISO 20022 Test Platform